Former FCC Chairman Says Data Caps Are More About Monetizing Traffic Than Controlling Congestion

As long as there’s been the Internet, cable companies have always teased its customers with data caps, which we’re sure you recall is exactly how Internet access was given back in the 90s. Nowadays, the only industry that has issued data caps on Internet-related data is the mobile industry as the majority of wireless carriers have implemented data caps.

For years, we’ve been told the purpose of data caps has been to help deal with congestion as cable companies apparently are always suffering from all of their customers watching Netflix at the same time. It turns out there really is no congestion that require cable companies to charge you more for going over a limit they attempt to enforce, instead, it’s all about increasing revenue for broadband providers.

Former FCC Chairman Michael Powell was speaking with a Minority Media and Telecommunications Association audience recently, saying, “cable’s interest in usage-based pricing was not principally about network congestion, but instead about pricing fairness.” When asked to weigh in on data caps, Powell said labeling the cable industry’s interest as an issue about congestion management to be “wrong.” “Our principal purpose is how to fairly monetize a high fixed cost.”